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1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $3,000,000 for the continued development and expansion of a large-scale sports complex based in Tallahassee, Florida. Sports Complex, LLC (“the Company”) was founded by Jeffrey Greene. The location will feature a broad range of sports training services across a number of sports including football, baseball, basketball, and swimming. The Company’s location will feature an Olympic-sized swimming pool. The Company will produce its income across a number of revenue streams including a membership program.
1.1 The Services
Sports Complex will be a 30,000 square foot facility that will feature a full-scale fitness center, basketball courts, an outdoor soccer training field, and an outdoor baseball training facility (including batting cages). It is expected that people of all ages will become members given the expansive nature of the facility.
In regards to revenue, the Company will produce its income in a number of ways. First, the Company intends to implement a membership program. This will provide patrons will full access to the facilities and its numerous amenities. This will also produce recurring streams of revenue for the business. Individuals that are members will have their credit/debit cards charged on a monthly basis. These fees will range from $50 to $100. The Company will also produce income from group training sessions, one-on-one sessions, and merchandise sales. The location will feature a number of vending machines that will provide beverages and healthy snacks.
Chapter three will discuss the operations of the Sports Complex.
1.2 Financing
At this time, the Company is seeking $600,000 of investor financing and $2.4 million via a commercial mortgage. These funds will be used to acquire land, build the facilities, FF&E, and working capital. The second section of the business plan will further document the usage of these funds.
If necessary, Sports Complex, LLC would be a strong candidate for a revolving credit facility given the highly recurring income generated from membership. However, given the high gross margins generated from all revenue centers – it is unlikely that the business would need additional capital.
1.3 Mission Statement
The Company’s mission is to provide the Tallahassee general public with affordable access to a state-of-the-art sports complex that provides numerous outlets for athletic activities.
1.4 Management Team
Jeffrey Greene has been involved in the field of athletics for the past 15 years. He has served in numerous managerial positions in this industry including as an athletic director.
1.5 Sales Forecasts
1.6 Expansion Plan
Sports Complex, LLC will make continued investments into acquiring new equipment while concurrently hiring additional instructors that will guide group practices and one-on-one lessons. This will significantly boost the billings of the Sports Complex over the next three years. The Company may also establish additional locations within Florida if it is economically viable to do so.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Sports Complex, LLC.
2.2 Required Funds
A capital investment of $600,000 coupled with a commercial loan of $2.4 million is needed to develop the operations of Sports Complex, LLC.
2.3 Investor Equity
Tentatively, Management intends to sell a 40% equity interest stake in the business in exchange for the equity capital needed.
2.4 Management Equity
Jeffrey Greene will retain a 60% ownership interest.
2.5 Exit Strategies
Given the scope and scale of this business, it would take twelve to eighteen months to find a suitable buyer. Including the land, building, and FF&E – the Sports Complex could be worth up to $5 million within the next five years. If the business is to be sold, the Company will have both real estate and business valuations completed.
3.0 Sports Complex Services
As stated in the executive summary, the Company intends to develop a 30,000 square foot complex in a warehouse facility in Tallahassee. Approximately one-third of the location will be specific for the Olympic swimming pool while the remainder of the space will feature a state-of-the-art fitness center and sports training facilities. The Company is currently working with several vendors that will supply equipment for the business.
The membership-based operations of the business is the most important aspect of revenue generation. As these fees will be billed on a recurring basis, the Company will be able to more effectively manage its underlying cash flows. The business will also be able leverage credit facilities in the future based on the regularity of earnings. Additional fees will come from one-on-one and group training lessons for a wide range of sports as well as for cardiovascular training. These classes will be hosted seven days per week and during all business hours.
The Company’s trainers and instructors will be hired both as direct employees and as independent contractors depending on the amount of time that they will render services at the facilities.
In regards to food and beverages, the Company will have a number of state-of-the-art vending machines throughout the facilities. These machines will provide bottled beverages and healthy foods that will be stocked weekly. In the future, the Company may develop a small-scale healthy café on the premises in order to serve hot meals.
The Company, in order to reduce operational risks, will maintain numerous insurance policies to protect the business in the event of an accident. Additionally, all participants at the Sports Complex will be required to sign a waiver that indemnifies the business against any claim in the event of an injury. Management is currently coordinating these efforts with the business’ retained attorney.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
Sports complexes tend to remain as economically viable businesses in any economic climate given the demand among patrons to remain healthy. Additionally, these centers often provide athletic training specifically for the needs of high school and college students who want to pursue athletic endeavors. The recurring income from membership coupled with the highly predictable income from training sessions allows these businesses to maintain profitability.
The US economic condition is currently strong. Although increases in interest rates have caused the cost of borrowing to increase, the demand for new enterprises is still growing. Unemployment rates remain low and consumer confidence is increasing. As discussed earlier, any negative changes in the economy will only have a modest impact on the Company’s top line income.
4.2 Industry Analysis
There are over 125,000 locations that provide sports training and fitness improvement services. Each year, these businesses produce approximately $30 billion of revenue. About 900,000 people work in the sports, fitness, and wellness sectors.
The industry is expected to enjoy substantial growth over the next ten years as people are increasingly wanting to remain in shape and improve their physical fitness. It is no secret that obesity is an issue given that more people are living sedentary lifestyles. The business is in a strong position to capture this demand within the Tallahassee market as it establishes its operations.
4.3 Customer Profile
Admittedly, the demographics that the Sports Complex will target in the Tallahassee market are broad. This is primarily due to the fact that any individual that wants to improve their health or participate in sports is a potential customer. The demand for these services spans the entire socioeconomic spectrum. The following demographic profile will be implemented as Sports Complex engages its marketing:
- Median household income exceeding $65,000
- Will spend $100 to $300 per month at Sports Complex, LLC
- Is located within 10 miles of the Company’s Tallahassee location.
In your local market, you will need to determine the population size, population density, average and median household incomes, and the number of potential members that your sports complex will have. It is important to also look at the number of high schools, colleges, and universities in the market as well.
4.4 Competition
The immense nature of the Sports Complex’s operations will provide a major differentiating factor for the business. The Olympic sized swimming pool will be a major driver of the Company’s growth as swimming is enjoyed by people of all ages. The location will feature swimming lessons for young children, which will contribute to increased visibility for the facility. The Company’s ability to render one-on-one training sessions will also provide the business with a major benefit.
For your sports complex, you can discuss the specific elements that you are incorporating into your organization that sets your business apart. You can also discuss any pricing structure that makes your business more attractive to potential members.
5.0 Marketing Plan
The Sports Complex will implement several marketing strategies throughout the life of the business in order to ensure a substantial membership base. The Company will also partner with a number of professionals in the sports training industry in order to have them provide comprehensive instructor at the Sports Complex location.
5.1 Marketing Objectives
- Continually create relationships with high school coaches, college/university coaches, directors, and other managerial level staff that are involved in the field of sports.
- Host open houses in order to showcase the Sports Complex to potential members.
- Continually use new online marketing strategies to create interest in the Tallahassee location.
5.2 Marketing Strategies
Foremost, the Company will engage a number of marketing campaigns during the course of development. The business will partner with athletic coaches and directors throughout the Florida panhandle in order to ensure significant brand name visibility once the business launches its operations. This will allow for referrals among high school and college athletes that will participate in the Sports Complex’s training programs. These outreach programs will start as soon as the requisite capital has been acquired.
Once the facility is completed, the Company will host several open houses that will allow potential members to tour the facilities. Each prospective member will be given a free day pass so that they can enjoy the facilities. It is expected that 50% of people that use a free day pass will ultimately enroll as a member. Of special importance to these operations will be to provide free access to the Olympic sized swimming pool. This will promote usage among families.
As it relates to online marketing, the Company will initiate its social media pages during the course of the development. These marketing operations will run concurrently to the direct marketing programs that will be undertaken in the Tallahassee area. The Company’s pages will showcase the facilities, provide promotions related to new membership, and provide regular updates about upcoming events at the facility.
The Sports Complex’s website will feature reservations and ecommerce functionality so that individuals can become members without having the directly come to the location. Training sessions, one-on-one sessions, and other events can be booked through the platform as well. The business will engage in SEO strategies that are specific for the Tallahassee market area.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
6.3 Management Biographies
The vast majority of people that establish Sports Complexes have worked in the field of personal fitness in the past (especially among people that have managed a fitness center or have served as an athletic director). Here, you can indicate your athletic, fitness, and managerial experience as it relates to developing your own sports complex.
7.0 Financial Plan
7.1 Underlying Assumptions
Management has based the financial plan on the following:
• Investors will contribute $600,000, as equity, for the down payment.
• The Sports Complex will acquire a $2.4 million loan carrying a 25-year term and a 7% interest rate.
7.2 Sensitivity Analysis
As has been one of the primary themes throughout this business plan, the demand for comprehensive sports training and fitness services remains strong. This is especially true among high school and college athletes that are seeking to improve their athletic performance with the intent of becoming a professional athlete. The recurring income from membership as well as the numerous predictable revenue streams will ensure that the Sports Complex can operate at profit at all times.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
